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March 2018

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The decline in cotton prices in international markets is going to affect Kenyan cotton cultivators as they now cannot expect the producer price to increase beyond the current KE shillings 65 per kg.

Cotton prices in global markets have witnesses a sharp 43 percent decline from US$ 1.78 per pound (1 pound = 0.454 kg approximately) last year to US$ 1 per pound at present.

This makes the current farm-gate price of KE shillings 65 per kg set last year unsustainable for the Cotton Development Authority (CODA).

CODA has suggested that the price paid to cotton producers be revised downwards to between KE shillings 50 and 55 per kg.

The price review committee of CODA adjusts price to be paid to cotton growers by taking into account factors like global market trend and domestic cost of production.

Last year, the price was revised upwards to KE shillings 65 per kg from previous year's KE shillings 32 per kg. Hence, cotton farmers were expecting a further increase in price this year.

In Rift Valley, cotton farmers are holding onto their stock in expectation of better returns.

According to Mpeketoni-based Lake Kenyatta Farmers' Cooperative Society, which produces 70 percent of cotton produced in Lamu West region, farmers are hoping the price of cotton to improve next month and are holding onto a stock of more than 600 tons.

The Cooperative Society purchased 135 tons of cotton last year and this season it expects the production to rise owing to expectation of higher price.